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The Week Observed: September 25, 2015

By Daniel Hertz

25.9.2015

What City Observatory did this week

1. Zoning in everything—even the education gap. By now, thanks to renewed attention in major media outlets from writers like the New York Times‘ Nikole Hannah-Jones, many observers of housing policy debates are aware of the role of exclusionary zoning in promoting residential segregation. We look at a paper by Jonathan Rothwell that applies that insight one step further in showing that not only does that residential segregation result in more segregated public schools, but that those segregated schools in turn enlarge the gap in test scores between white students and students of color. Rothwell’s work in showing a straight line from more restrictive zoning policies to bigger “achievement gaps” is an important step forward in our understanding of the broader impacts of segregatory housing policies.

2. Why are metropolitan areas more “equal” than their central cities? In almost every one of the 50 largest metropolitan areas, central cities show more income inequality than their surrounding suburbs. But while at the national level, more inequality is generally unambiguously bad, at the local level, it’s a very different story. Take, for example, Flower Mound, TX—a Dallas suburb with one of the lowest levels of “inequality” in the country. Flower Mound’s average income is more than twice that of the Dallas area as a whole, and is well over 20 percentage points whiter, meaning that its “equality” is really a result of excluding the people of color and low-income residents who have to find homes somewhere else.

3. What else does the new “severely rent-burdened” report tell us? Digging beyond the headlines predicting a sharp increase in the number of renters paying over half of their income for housing, we find several other lessons from the report from Harvard’s Joint Center for Housing Studies and Enterprise Community Partners. One of them: a huge proportion of new renter households will be single people—some Millennials, but largely the elderly, and especially elderly women. Building housing that can accommodate them affordably is a crucial challenge.

4. The immaculate conception theory of your neighborhood’s origins. Many debates about today’s housing development involve nostalgic calls to return to the supposedly more humane, sustainable construction of earlier eras. But a closer look reveals that, say, the early 20th century bungalow era doesn’t actually look anything like the idyll we imagine. If we’re going to take lessons from the past, we need to be realistic about what really happened. Part of the story is that new housing is almost always expensive—and that our cities have historically relied on modestly-sized homes in multifamily buildings to provide homes for the working class and people of modest incomes.

The week’s must reads

1. At the Washington Post, Emily Badger and Christopher Ingraham havecharted the number of housing units by type—single family homes, rowhomes, two flats, and so on onto large apartment buildings—for cities across the country. They find that almost everywhere but older cities in the North and East, single family homes dominate. Also evident: the huge role of rowhomes in places like Baltimore, Philadelphia, and Washington, DC.

2. Well over a million Americans live in public housing today, even after decades of declining stock. At The Atlantic, Alana Semuels covers the case, largely from University of Minnesota professor Ed Goetz, that public housing’s stigma is mostly undeserved, and it still has a major role to play in affordable housing. Semuels traces the history of public housing, from a program aimed largely at the working class towards its stigmatization as “housing of last result” for the poorest of the poor—but points out that even at its nadir, the sort of epic dysfunction publicized in places like Chicago’s Cabrini-Green always represented a relatively small minority of project sites.

3. “Shut up and take my money—before I board,” says “the Transportationist,” University of Minnesota professor David Levinson. Levinson makes the case that one of the greatest missed opportunities to improve bus service is off-board fare collection—with either turnstiles or, much more cost-efficiently, pre-pay kiosks that allow passengers to tap their cards before the bus arrives, dramatically speeding up the boarding process.

New knowledge

1. At Tech Crunch, Kim-Mai Cutler reports on a study by the rental market analyst firm Zumper, indicating that up to a third of the rental cost in cities like San Francisco is a result of venture capital funding. Even after controlling for income, home values, vacancy rates, and rent control ordinances, Zumper found that amount of venture capital funding in a metropolitan area had a major upward effect on rents. Two caveats: first, the study didn’t take into account local zoning practices, which have been shown to have major effects on housing prices; and two, many organizations like Zumper have rental listings that are skewed towards the higher end of the market for various reasons. Still, this is some empirical evidence to support a plausible theory: the speed at which venture money can be grown and invested vastly outstrips the speed at which housing construction can respond, which would lead to these sorts of rent increases.

2. Another z-named housing market analysis firm, Zillow, reported this week that in many of the nation’s largest, most successful metropolitan areas, a significant proportion of homes actually lost value over the last year. Boston, Washington, DC, and Philadelphia all had over 40 percent of their homes lose value—while in Seattle, Portland, and Dallas, that number was under 10 percent. Zillow’s report didn’t indicate any geographic trends within metro areas—whether, say, homes with declining prices were concentrated in city cores or the suburban periphery. Look for City Observatory to do some follow-up work on this question.

3. The Lincoln Institute of Land Policy released a report looking at inclusionary zoning—an affordable housing policy used in cities across the country that requires private builders to include low-income units in their developments, or pay for them somewhere else. Among the conclusions: the need to perform analysis to make sure that affordability requirements can be absorbed by developers; track the program’s impact to see how many units are actually produced (in our opinion, this number is often far too small to make a real difference in affordability); and ensure that the geographic distribution of affordable units is promoting integrated neighborhoods.

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